Analysts at Rabobank, see the Brazilian economic Q2 forecast in step with full-2019 GDP growth of zero.5-0.6%, which means the third year in a very row with the economy rising by I Chronicles or less. For 2020, despite world headwinds, they expect some higher traction (especially from investment) on the heels of lower policy charge per unit, easier native monetary conditions and a reform-led boost in confidence.
Key Quotes:
“In recent days, external headwinds (i.e. trade war increase and world economy slowdown) haven’t given Brazilian assets an occasion, despite of signals of AN rising domestic outlook. If short term fundamentals (e.g. globally stronger USD) do make a case for a part of the BRL sell-off, our models recommend there should still be some influence of buzzing technicals (or premium build-up). and therefore the latter may be partially related to the deterioration of markets and outlook in Argentina.”
“We have reasons to believe that our neighbor’s woes ought to have restricted event effects for Brazil once the mud settles. which partially helps make a case for why we tend to still see USD/BRL around three.70-3.80 for the top of this year (which appears like a daring, if not superannuated estimate right now).”
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